# DOJ Prosecutes USPS Repair Contract Kickbacks

On October 27, 2026, contractor Ilya Zagaryuk pleaded guilty to conspiring to pay more than $465,000 in kickbacks tied to U.S. Postal Service facilities-repair work across Oregon, Idaho, Wyoming, Montana, and Washington. The scheme used inflated estimates and invoices to fund payments; Zagaryuk agreed to $465,347.75 in restitution. The case underscores federal scrutiny of subcontractor selection, pricing, invoicing, and conflicts of interest in facilities contracting.

- Contractors performing USPS or other federal facilities work should strengthen controls over subcontractor selection, pricing, invoices, and conflicts of interest.
- Procurement and compliance teams can use independent estimate and invoice review to help identify inflated costs and irregular subcontracting arrangements.
- Contractors should promptly report suspected procurement collusion through the DOJ Procurement Collusion Strike Force, as referenced in the signal.

**Jurisdictions:** federal
**Industries:** Construction & Infrastructure
**Topics:** Regulatory Compliance
**Published:** October 27, 2026

### Government Entities
- U.S. Department of Justice (DOJ)
- U.S. Postal Service (USPS)
- U.S. Postal Service Office of Inspector General (USPS OIG)
- U.S. Department of Justice Antitrust Division

### Key Quotes
> Zagaryuk and his co-conspirator conspired to inflate subcontracts to build in a split between themselves. They did this countless times and cheated the U.S. Postal Service out of honest contracting and invoicing.
> — Daniel W. Glad, Acting Deputy Assistant Attorney General for Criminal Enforcement

> Schemes like this drain public resources and undermine confidence in how federal funds are managed. Our Office will continue working closely with our federal partners to uncover procurement fraud and ensure that public money is spent honestly and lawfully.
> — Eric Grant, U.S. Attorney for the Eastern District of California

### Sources
- [ Office of Public Affairs |  Contractor Pleads Guilty to Paying Kickbacks Related to U.S. Postal Service Facilities Repair Contracts | United States Department of Justice](https://www.justice.gov/opa/pr/contractor-pleads-guilty-paying-kickbacks-related-us-postal-service-facilities-repair) - DOJ